Football Governance Bill [HL]

Lord Parkinson of Whitley Bay Excerpts

Committee stage
Monday 2nd December 2024 Lords Chamber

[Lord Mann (Lab)]

My Lords, I appreciate that it is a little unconventional to speak to the amendment, but I would like to make a few comments to the mover of the amendment and the Minister. The case was made that this is all about small clubs. I have met very many clubs outside of the Premier League and discussed this issue with them. They have raised many issues and changes that they would like to see, some of which might be controversial in the football world or in government but not in relation to this regulation Bill. I have not yet come across any club outside of the Premier League that has said that it is worried or opposes this Bill—not one. Perhaps the Minister might like to reflect on that.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to my noble friend Lord Jackson of Peterborough for moving his Amendment 16. It has been well worth having a debate on this on its own because his short and simple amendment, if inserted into the Bill, would represent a vital step towards ensuring that the regulation of English football was both fair and economically responsible. It would require the independent football regulator to consider the potential economic harms of overregulation.

As my noble friend so eloquently established, overregulation is an issue that can choke off investment and disrupt growth in many industries. It can also, as my noble friend Lord Maude of Horsham powerfully reminded us by invoking the example of Brighton and Hove Albion, prohibit the visionaries and the innovators who help to drive industries and sectors forward. None of us wants to see that harmful effect happening in the case of this new regulator and the example of football.

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[Lord Mann (Lab)]

I was a member of that group and heavily involved in that work. Will the noble Lord reflect on the fact that all of its recommendations request that the regulator, the FCA, regulate more toughly and more appropriately, not less and more weakly, including the cases involving football that I am personally very involved in? That was a case for more and stronger regulation, not less.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble Lord for his intervention and for mentioning that. The point remains that it would be beneficial for us to look at that report on the way in which the FCA is doing its work to see whether it is doing what Parliament asked it to do when it was set up and to see whether we agree with the points that the all-party group, of which he is a member, made in its recent report.

As a number of noble Lords from across the House have said in our debate on this group, the amendment simply requires the regulator to have regard to the risks inherent when regulating a large industry such as football. I am grateful to my noble friends Lord Moynihan and Lord Maude of Horsham for the benefit of their considerable expertise and to my noble friend Lord Hayward for going so forensically through the impact assessment published by the Minister’s department.

My noble friend Lord Jackson’s Amendment 16 represents another guardrail for the regulator to use to focus its attention when exercising its functions. It would complement some of the other amendments that I have tabled and which we have been looking at. Such simple insertions of text into the Bill may be criticised as unnecessary, but they are important. The language that we use when establishing in law new public bodies and new regulators is of supreme importance. It creates a starting point from which that body will grow or change and be investigated by all-party groups and Select Committees. What that starting point looks like and how it is clearly defined has the potential to shape its future trajectory. We are looking at a regulator we hope will do its work very successfully for generations to come. Surely, we want that trajectory to enable future growth and innovation—future visionaries—and to remain free from mission creep and expansion into areas which we do not want to see it moving in.

The proposed model of regulation in the Bill will require the frequent submission of reports and financial plans. These will, as per the licensing conditions and as per our debate on this group, all have to be approved before a regulated club is granted a licence and are a condition for it maintaining that licence. The monitoring and collection of that information will naturally require a large number of staff to help comply with the new regulation. Added to the costs of the levy, this could have damaging effects on regulated clubs—damaging effects, as my noble friend Lord Maude of Horsham and others powerfully set out, that would be felt most keenly by those at the lower end of the pyramid.

That is also particularly evident in the provisions in the Bill that require clubs which are no longer regulated, by virtue of their relegation, to continue to comply with the duties set out. Part 5, for instance, states that some of these duties will be applicable for up to 10 years after the club has been regulated. This ratchet effect means that clubs could still be required to submit a whole host of information to the regulator, even when they have diminished resources because they have dropped below the lower limit of the regulatory ambit envisaged by the Bill. I hope that we can all see the potential for harms here and the risks of those harms growing.

I am grateful to the noble Baroness, Lady Taylor of Bolton, for drawing the Committee’s attention to her Amendment 72. We should all take a careful look at it in light of the debate that we have had. We will touch on it when we come to that group later on, but I appreciate that it is an attempt to make that sort of regulatory burden easier on clubs. When we come to it, I will ask her more on how her amendment envisages the regulator potentially paying some money to clubs. I will be interested to hear her set that out, but that is for another group.

Football is not only an extremely popular pastime but a vital part of our economy, and the financial health of clubs has to be protected, as my noble friend Lord Jackson’s Amendment 16 seeks to do. By mandating a thorough assessment of the financial implications of the new regulator’s regulatory actions, his amendment would guarantee that clubs’ sustainability would never be overlooked in the pursuit of regulation or reform.

The requirement for regular reports to be submitted to the Secretary of State and laid before Parliament would add to the Bill’s parliamentary oversight, which it currently lacks. It would enhance the transparency of the new regime that we will be bringing in through this law and allow for prompt corrective action, if needed. That is an approach which aligns perfectly with Conservative values, but one which I hope would garner support from every corner of your Lordships’ House. As my noble friend Lady Brady has reminded us, the Prime Minister has recently spoken, to my mind encouragingly, about the risks of overregulation and the need for growth. I hope that these points will resonate with the Benches opposite and with the Minister too.

My noble friend’s amendment seeks to safeguard the future of football while maintaining accountability to Parliament. I know that he would have tabled an amendment such as this if we were still in the last Parliament. If I had found myself at the Dispatch Box opposite, I would have been responding to it. I must say that I would have looked very favourably on it. I think it seeks to strike the right balance between regulation and the economic vitality and viability of football clubs. I hope the Minister will look favourably on it as well.

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)]

I thank the noble Lord, Lord Jackson of Peterborough, for tabling this amendment. I also particularly welcomed the personal account of the noble Lord, Lord Moynihan. I thank all those who contributed, including the noble Lord, Lord Maude of Horsham, who has considerable expertise in regulation. The description from the noble Lord, Lord Birt, of the benefits of regulation, including a strong board and what advantage that might bring, was particularly helpful.

In response to the noble Lord, Lord Goodman, we will cover the scope of specified competition in the next group, so your Lordships’ Committee will come to that shortly.

The amendment seeks to add an explicit requirement for the regulator to have “due regard” to the potential economic harms of overregulation and to report on this. It is an important point to be aired, and I welcome the opportunity to respond to the concerns the noble Lord has. I absolutely agree that overregulation is something to be avoided. It is why the regulator’s general duties and regulatory principles provide sufficient safeguards to prevent this.

The regulation ensures that the regime is proportionate. In particular, Clauses 7 and 8 emphasise the need for the regulator to act in a way that avoids, as far as reasonably possible, adverse effects on investment and competitiveness, and that it should act proportionately.

The noble Lord, Lord Jackson, asked about overregulation and was echoed by the noble Baroness, Lady Brady. The regulator’s general duties require it to have regard to how regulation might affect, among other things, financial investment in English football. Its regulatory principles clearly state the importance of advocacy and the need for the regulator to engage with stakeholders. It must act, as I said, in a proportionate manner. All these measures provide a safeguard against overregulation.

The noble Lords, Lord Hayward and Lord Maude, asked about burdens or potential costs on small clubs and the risk of disproportionate burdens. In addition to the explicit regulatory principle guiding the regulator to be proportionate, the entire system has been designed with this proportionality in mind. For example, the licence conditions placed on clubs will vary depending on their unique circumstances. Where clubs are smaller or lower-risk, the regulator’s requirements will reflect this. This means that the regulator will not impose unnecessary burdens on smaller or already well-run clubs.

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[Lord Goddard of Stockport (LD)]

My Lords, nobody faint, but on this issue I fully support the noble Lord, Lord Parkinson. I bear the scars of Democracy Denied? It was an excellent report that it took us quite a long time to bring through. The Government cannot have it both ways. We say that the purpose of the Bill

“is to protect and promote the sustainability of English football”,

yet it does not explain what English football is.

That is the nub of this. We spent hours on the first part of that, but the second part we seem to want to leave to the Government, because it is seemingly easier to amend delegated powers than primary legislation powers. That is not the point. What is in the tin should be on the front of the tin. It should name what it is doing, which is the Premier League and the Championship. It could go down the tiers and include leagues north and south. You would then have a full list of what this legislation is covering. It is probably just bad drafting, and no more than that. This could be done very simply. Everybody would then understand what the Bill is about.

[Lord Parkinson of Whitley Bay (Con)]

I will speak to my amendments in this group, and I want to extend the point that the noble Lord, Lord Goddard of Stockport, has just made, as it is a very important one.

I appreciate this may have been a painful experience for the Minister, the Bill team and others. We have spent our first two days in Committee looking at Clause 1 and the definitions of “the sustainability of English football”. However, as the noble Lord said, the lack of precision in the Bill in that regard is what has elongated our debates over the last two days in Committee and so concerned the Delegated Powers and Regulatory Reform Committee of your Lordships’ House. It bears repetition to draw the Committee’s attention to paragraph 3 of the committee’s report, published on 22 November:

“The fundamental purpose of the Bill is to ‘protect and promote the sustainability of English football’. One must go through a series of definitions only to find that the Bill does not, after all, provide the definition of English football. Ultimately, the meaning of ‘English football’ depends on regulations to be made in due course by the Secretary of State”.


That is why we have had some rather tortuous debates on the opening clauses of the Bill, and why we are concerned to ensure that this Committee brings the focus we need to the deliberations on this important Bill.

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A number of noble Lords raised the question of hybridity—

[Lord Parkinson of Whitley Bay (Con)]

Before the Minister comes on to that important point, could she say a bit more about what circumstances would need to change for the National League North and the National League South to be brought into scope in the Government’s view? The noble Lord, Lord Bassam, made a powerful case about the size of many of the clubs there and the very valid point, which I meant to echo in my contribution, that those are precisely the sort of teams the Government and their predecessors were both very concerned about in the thinking that led to the Bill—the sort of teams that play such an important role in their communities, that are sometimes more precarious than those at the top of the pyramid, and that, if they went under, would leave such a hole in their communities.

[Baroness Twycross (Lab)]

I am slightly confused because the noble Lord is going from being proportionate to now appearing to want us to bring in further—

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[Baroness Twycross (Lab)]

The primary reason, as I understand it—and it was clearly the previous Government who drafted the iteration of the Bill and the stage of the Bill that we are now at in our discussions is identical to the previous Government’s Bill—was that naming the leagues would mean that, if there was any change in the names of the leagues, there would be an issue in terms of the legislation, as I have outlined previously. I am happy to write to noble Lords on this point.

[Lord Parkinson of Whitley Bay (Con)]

I am sorry; I know this is frustrating. But this is a really important issue for the Bill and I think there is some confusion. During the debate on this, the noble Baroness very helpfully nodded to give a sense to the question—

[Baroness Twycross (Lab)]

It was hybrid—

[Lord Parkinson of Whitley Bay (Con)]

Let me just ask the question and then the Minister can clarify. Did she nod to agree to the suggestion that, if we had put the names of the leagues—which I seek to do in my amendment or which the noble Baroness and the noble Lord, Lord Bassam, seek to do in their Amendment 21—on the face of the Bill, this would make it a hybrid Bill, and the reason they are not in the Bill is to stop it being a hybrid Bill? That is what I think we think she was nodding to agree to earlier.

In the speech she has just given, she dismissed my amendment on the grounds that sometimes the names of the Premier League and the EFL and the National League change and that is the reason for doing it. That is a rather different answer from refusing to put it on the face of the Bill because it would make it a hybrid Bill. If allowing those leagues, those clubs, to have access to Parliament to make the arguments about the effects on their private interests and their business is the reason that it is not on the face of the Bill, I think they and this Committee need to know that.

[Baroness Twycross (Lab)]

I apologise hugely if my nodding at one point during the noble Lord’s comments meant that other things were inferred. It has reminded me of the dangers of nodding, whether you are nodding to indicate that you understand a point, or that you agree with a point. I was nodding was because in the explanation of this group of amendments that I received from officials earlier today, they made it clear that following the tabling of Amendments 19 and 21, issues have been raised about hybridity. That was the point at which hybridity was raised with me. I hope noble Lords will accept my writing to them to clear up any other issues that might have been raised. I know they want to work constructively on the Bill to make sure that we put in place as soon as possible an effective and proportionate regulator that safeguards the future of our national game, which was a manifesto commitment by the three main parties. I look forward to discussing these amendments further, ahead of Report.

[Baroness Twycross (Lab)]

Yes.

[Lord Parkinson of Whitley Bay (Con)]

With respect to the noble Baroness, Lady Taylor, that point is by the by. I had not appreciated the hybridity question until my Amendment 19 was tabled and the clerks advised me about it, as I am sure she had not in relation to her Amendment 21. It raises some fundamental questions. It is unfortunate that we have come to debate them at this late hour, and I am grateful to the Minister for undertaking to write to the Committee about this; I hope she will be able to do that before our next meeting.

We need to understand this point, because it is a further instance of democracy being denied—the limiting effect it has not just on the ability of both Houses of Parliament to scrutinise legislation, but on private citizens making representations to Parliament about the direct effect on their companies, businesses, clubs and organisations. I asked the Minister about Clause 91, which seeks to deny the right to use the hybrid powers so that they can make their views known directly. If we are going to go down the route that seeks to close this off not just in the Bill—in primary legislation—but in secondary legislation too, we need clarity on this before we go much further.

[Baroness Twycross (Lab)]

As I said, I will write to noble Lords on this point, noting that I know they want to work constructively on the Bill. I have a few more points to cover, so if I could continue without interruption, I will reply to anybody in writing if we need to.

On Amendment 25 in the name of the noble Lord, Lord Parkinson, I understand that delegated decisions of such importance as the scope of regulation should be made only after proper consideration and in consultation with all key stakeholders. This is exactly what has been done over several years of development of the Bill. It was carried out by the previous Government, in which, as has been noted, the noble Lord served, although I accept that we are bringing forward this legislation, so it is the Labour Government’s Bill now.

The initial intended scope of the Bill is built on a strong evidence base and extensive consultation with the industry, including a White Paper. Therefore, the Government do not feel it is necessary to require additional consultation before the first regulations are specified in scope in secondary regulation. This would impose unnecessary burdens on the industry and the Government and risk significantly delaying the regulator being able to implement its regime.

On the question that Clause 2 stand part of the Bill, I thank the noble Lord, Lord Moynihan, for giving notice of his intention to oppose this. As is standard procedure, the Bill sets out the key definitions used in this legislation. These are required to ensure that there is legal clarity throughout the Bill and to prevent confusion when looking to practically implement this legislation.

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[The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)]

I call Amendment 19 in the name of the noble Lord, Lord Parkinson of Whitley Bay.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am not willing to not move Amendment 19 yet. Given that the House is about to resume and be adjourned, it might be more helpful to degroup it and leave it as the first amendment that we return to when the Committee resumes. I appreciate that this is unusual, but I do it to try to be helpful. If the Minister can write on the points about hybridity, which she has kindly undertaken to do, then this is the point at which the Committee will resume when next it meets, so that we can return to this fundamental point. So I am not willing to not move Amendment 19 and I suggest we resume the House now.

House resumed.